Set up a PayPal account and link a bank account or card

To receive money on PayPal, you need an active PayPal account connected to a real bank account or debit card. When someone sends you money, PayPal holds it in your PayPal balance first — you then transfer it to your bank account to actually use it.

Start by going to paypal.com and clicking "Sign Up". You'll choose between a Personal account (for receiving money from friends and family or selling items) or a Business account (if you're running a business or taking payments from customers). Personal accounts are free to open and receive money; you only pay a fee when you receive money as a business payment.

After creating your account, PayPal will ask you to verify your identity and link a payment method. Add your bank account by providing your routing number and account number, or link a debit card. PayPal may make two small test deposits to your bank account (usually under $1 each) — you'll need to confirm the amounts in your PayPal account to prove you own that bank account. This step typically takes one to two business days.

Key Takeaways

  • Money sent to you lands in your PayPal balance first; you must transfer it to your bank account to withdraw it, which takes one to three business days.
  • Personal accounts receive money for free from friends and family, but cost 2.99% plus $0.30 per transaction when receiving business payments or invoices.
  • You can receive money through a PayPal.me link, by invoice, or by sharing your email address — the sender chooses the method.
  • PayPal holds some payments for up to 21 days if you're new, have a low transaction history, or the payment seems unusual; you can request an earlier release.

Receive money through PayPal.me or by sharing your email

The simplest way to receive money is to share your PayPal.me link. Go to your PayPal account, click your profile icon, and select "PayPal.me". Create a custom URL (like paypal.me/yourname) and share that link with anyone who wants to send you money. They click the link, enter an amount, and send it — no invoice required.

You can also just give someone your PayPal email address. They log into their PayPal account, click "Send Money", enter your email, choose an amount, and send it. This works the same way as PayPal.me but requires them to have a PayPal account.

For casual payments between friends and family, both methods are free. If the sender chooses "Friends and Family" as the payment type, PayPal takes no fee. If they accidentally send it as a "Goods and Services" payment instead, you'll see a fee deducted (2.99% plus $0.30 in the US).

Send an invoice to receive payment for work or sales

If you're selling something or providing a service, create an invoice instead of asking for a casual transfer. Go to your PayPal account, click "Tools", then "Invoicing". Enter the buyer's email, describe what you're selling or the service you provided, set the price, and send it.

The buyer receives an email with your invoice and a button to pay. They can pay with PayPal, a credit card, or a debit card — they don't need a PayPal account. When they pay, you'll be charged a fee: 2.99% plus $0.30 per transaction in the US (rates vary by country). This fee comes out of the money you receive, so if someone pays you $100 via invoice, you'll see about $96.71 in your PayPal balance.

Invoices are useful because they create a record of what was paid for, which protects both you and the buyer if there's a dispute later. You can also set a due date on the invoice, and PayPal will send the buyer a reminder if they don't pay by that date.

Understand holds and when PayPal delays your money

PayPal sometimes holds money you receive before releasing it to your account. A hold can last anywhere from a few days to 21 days, depending on your account history and the type of payment.

New accounts or accounts with little transaction history are held more often. If you're receiving money for the first time, PayPal may hold it for up to 21 days to make sure the transaction is legitimate. Unusual payments — a much larger amount than you normally receive, a payment from a new sender, or a payment from outside your country — can also trigger a hold.

You can request an earlier release. In your PayPal account, go to "Activity", find the held payment, and click it. Look for an option to "Request Release" or "Get it Now". PayPal may release it immediately, or it may keep the hold in place. If the hold is still there after a few days, contact PayPal Support through the "Resolution Center" in your account.

Transfer money from PayPal to your bank account

Money in your PayPal balance is not the same as money in your bank account. To actually use it, you need to transfer it. Go to your PayPal account, click "Wallet", then "Transfer Money". Choose "Transfer to your bank account", enter the amount, and confirm.

A standard transfer takes one to three business days. PayPal also offers "Instant Transfer" to most debit cards for a small fee (usually $0.25 to $2, depending on the amount). Instant transfers arrive within 30 minutes, but you pay for the speed.

You can only transfer to a bank account or debit card you've already linked to your PayPal account. If you haven't linked one yet, add it in the "Wallet" section before you try to transfer.

Know the difference between Personal and Business accounts

A Personal account is free and best if you're receiving money from friends, family, or selling items occasionally. Receiving money from friends and family costs nothing. Receiving money as a business payment (through an invoice or business transfer) costs 2.99% plus $0.30 per transaction.

A Business account is designed for people who take payments regularly as part of running a business. It costs the same fees as a Personal account for business payments, but it gives you access to more tools: bulk invoicing, detailed sales reports, the ability to accept payments on a website, and a business name on your PayPal profile. If you're selling items on eBay or running a small business, a Business account may be worth it.

You can start with a Personal account and upgrade to Business later if you need to. The upgrade is free and takes a few minutes.

Protect yourself from fraud and disputes

PayPal offers some protection if a payment is reversed or disputed, but it's not complete. If someone sends you money and then claims they didn't authorize it, PayPal may take the money back from your account — even if you've already transferred it to your bank. This is called a chargeback or reversal.

To reduce risk: keep records of what you sold or the service you provided, use invoices instead of casual transfers when possible (invoices create a paper trail), and be cautious of unusually large payments from new senders. If a payment seems suspicious, you can decline it or ask the sender for more information before accepting it.

If a payment is reversed and your account balance goes negative, you'll owe PayPal the money. They may hold future payments or ask you to pay the balance directly.

Frequently Asked Questions

How long does it take to receive money on PayPal?

Money arrives in your PayPal balance instantly or within a few minutes of the sender completing the transfer. However, PayPal may hold the money for up to 21 days before you can transfer it to your bank account, especially if you're new or the payment seems unusual. Once you transfer it to your bank, it takes one to three business days to appear in your account (or 30 minutes if you pay for Instant Transfer).

Can I receive money on PayPal without a bank account?

You can receive money and hold it in your PayPal balance without a bank account, but you won't be able to transfer it out. To actually use the money, you need to link a bank account or debit card. PayPal requires this for security and to comply with financial regulations.

What if I receive money by mistake?

Contact the sender and ask them to request a refund through PayPal. They can do this in their account under "Activity" by clicking the payment and selecting "Request Refund". If they don't refund it, you can contact PayPal Support, but PayPal will likely tell you to work it out with the sender first. Do not spend money that was sent to you by mistake — if the sender disputes it, PayPal will reverse the payment.

Do I pay taxes on money I receive through PayPal?

That depends on what the money is for. Money from friends and family as a gift is not taxable. Money you receive for selling items or providing services is usually taxable income. PayPal reports large transactions to the IRS (the threshold varies by year and transaction type), so keep your own records of what you sold and how much you earned.

Why is my money on hold?

PayPal holds money to verify the transaction is legitimate and reduce fraud. New accounts, large payments, payments from new senders, and payments from outside your country are held more often. You can request an early release in your account, but PayPal may keep the hold in place if it thinks the transaction is risky.